Sky Harbor’s passenger counts dropped in 2013

Passenger counts at Sky Harbor International Airport dipped again last year, in contrast to gains reported at several other major airports, potentially jeopardizing Phoenix’s long-held status as one of the nation’s 10 busiest airports.

Sky Harbor handled 40.34 million passengers, down 0.3 percent from 40.45 million in 2012 as gains among small airlines were more than offset by passenger declines at several major airlines that have cut flights to and from Phoenix. The figure includes local and connecting passengers, each counted when they arrive and depart. Sky Harbor is still nearly 2 million passengers below the record level of 42.2 million passengers set in 2007, before the recession hit.

The 2013 top airport rankings by the federal Bureau of Transportation Statistics won’t be out until March, but most of Sky Harbor’s peers on the 2012 list have also already released their passenger statistics for the year, providing a preview. Sky Harbor ranked No. 10 in 2012, falling from No. 8, so it doesn’t have far to fall out of the top 10.

Unlike Sky Harbor, several airports in the 2012 top 10 reported passenger gains in 2013. They include Los Angeles, up 4.7 percent, Dallas/Fort Worth, up 3.2 percent, San Francisco, up 1.2 percent, Charlotte, N.C., up 5.4 percent, Las Vegas, up 0.5 percent, and Chicago O’Hare, up 0.12 percent. New York (JFK) reported record passenger volumes but hasn’t released specifics. Besides Phoenix, the only airports among last year’s top 10 to report passenger declines were No. 1 Atlanta, down 1.1 percent, and Denver, down 1.1 percent.

Houston, which ranked just behind Phoenix in the 2012 rankings, reported a 0.2 percent decline in total passengers in 2013, to 39.8 million, but Miami, which was just behind Houston at No. 12, reported a 2.8 percent increase in total passengers, from 39.5 million to 40.56 million, which is more than Phoenix and Houston.

The BTS ranks airlines by passenger enplanements, or boardings, not total passengers, and its boarding numbers are not always identical to those released by airports, so it’s unclear whether Miami will leapfrog into the 10 spot.

Deborah Ostreicher, deputy aviation director for Phoenix, concedes Sky Harbor’s top 10 ranking might be in jeopardy but she says if it happens it will be by a slim margin and is not worrisome.

“If you look at the (passenger) numbers, it’s all very close,’’ she said.

Still, the airport has lost passengers for two consecutive years and passenger volume remains below pre-recession levels at a time when some airports are reporting passenger records. Sky Harbor’s passenger levels were down year-over-year for six consecutive months in 2013 until December levels spiked due to the shift of peak Thanksgiving travel from November to December.

Ostreicher calls traffic essentially flat the past two years and says the airport’s numbers are on par with projections. She pointed to last week’s announcement that Standard & Poor’s had maintained the airport’s strong bond rating.

“With the economy being the way that it is, I think that we are maintaining our traffic,” she said. “If we were dramatically losing passengers that would be of concern in the sense that we would want to review our plans moving forward.”

Lee McPheters, research economist at Arizona State University’s W.P. Carey School of Business and the author of several economic-impact studies on Sky Harbor, said it is not surprising that travel at Sky Harbor was down last year given the still sluggish economy. Travel is a discretionary item for vacationers and many businesses.

“The Arizona economy did not grow any faster in 2013 than it did in 2012. It was another very slow growth year,’’ he said. “We’ve not seen any kind of economic breakout.”

Another major factor hurting passenger counts at Sky Harbor: the U.S. airline industry’s dramatic shrinking the past several years due to high fuel prices, the recession and megamergers.

Carriers have unapologetically cut domestic routes, flight frequencies and even hubs. United Airlines, which merged with Continental Airlines in 2010, a week ago said it will eliminate Cleveland as a hub because it said it has been unprofitable for years.

Phoenix has by some measures been hit harder than other airports, according to an Arizona Republic analysis last fall, due to myriad factors including its airline lineup, bigger concentration of cheap-ticket-seeking vacation travelers vs. coveted big-dollar business travelers and relative lack of international service, which has been a growth spot. Takeoffs and landings by air carriers fell 6.5 percent at Sky Harbor last year.

Southwest Airlines, which accounts for 30 percent of Sky Harbor’s passengers and carries more local passengers than any carrier including US Airways, has been pruning flights into and out of Phoenix for the past few years so it can expand elsewhere without growing the overall airline. It has cut non-stop destinations from Sky Harbor and flight frequencies on many routes.

Last year alone, it cut one daily roundtrip flight between Phoenix and Albuquerque, Burbank, Calif., Denver, Milwaukee and San Francisco and two to Las Vegas, spokeswoman Whitney Eichinger said. Phoenix is home to one of its largest operations but the airline’s focus on growth is elsewhere.

Southwest, which has also sharply raised ticket prices, saw its Phoenix passenger counts fall 1.3 percent in 2013, to 12.4 million. It carried roughly 161,000 fewer passengers into and out of Sky Harbor than it did in 2012.

United has been pruning its schedule in Phoenix and around the country since the merger with Continental, eliminating some flights and switching some from year-round to seasonal. Last year, for example, United eliminated non-stop service in the summer between Phoenix and Cleveland, spokeswoman Mary Clark said. (That route will go away completely in late May due to the airline’s downsizing in Cleveland.)

The upshot in Phoenix: United carried 105,668 fewer passengers in and out of Sky Harbor last year, a decline of 5.2 percent.

US Airways, which carries nearly half of the airport’s passengers, saw traffic increase by a fraction last year, to nearly 19.8 million, but there are concerns about flight cutbacks going forward as the airline combines with American Airlines. American’s passenger counts at Sky Harbor last year were up 5.5 percent, but officials could not pinpoint any flight changes that would explain it.

Frontier, which has been restructuring its business and was recently purchased by a Phoenix investment firm headed by former America West Airlines and Spirit Airlines Chairman Bill Franke, reported a 7 percent drop in passengers, to 408,692.

JetBlue, which has always had a limited presence in Phoenix, carried nearly 14 percent fewer passengers at Sky Harbor in 2013 after it eliminated one of its two daily Phoenix-New York flights.

Carriers posting the biggest gains at Sky Harbor last year included Canadian carrier WestJet, whose passenger totals grew nearly 7 percent, to 340,776, as the airline boosted seasonal service between Phoenix and Calgary and British Columbia. British Airways reported a 13 percent increase in passengers, to 205,059, after it increased is Phoenix-London service to seven days a week from six.

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